Oil and Gas Exploration and Production AD's (BUL:NGAZ) Sluggish Earnings Might Be Just The Beginning Of Its Problems

The subdued market reaction suggests that Oil and Gas Exploration and Production AD's (BUL:NGAZ) recent earnings didn't contain any surprises. We think that investors are worried about some weaknesses underlying the earnings.

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How Do Unusual Items Influence Profit?

To properly understand Oil and Gas Exploration and Production AD's profit results, we need to consider the лв742k gain attributed to unusual items. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. Which is hardly surprising, given the name. Oil and Gas Exploration and Production AD had a rather significant contribution from unusual items relative to its profit to September 2025. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Oil and Gas Exploration and Production AD.

Our Take On Oil and Gas Exploration and Production AD's Profit Performance

As we discussed above, we think the significant positive unusual item makes Oil and Gas Exploration and Production AD's earnings a poor guide to its underlying profitability. For this reason, we think that Oil and Gas Exploration and Production AD's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. Nonetheless, it's still worth noting that its earnings per share have grown at 15% over the last three years. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Be aware that Oil and Gas Exploration and Production AD is showing 3 warning signs in our investment analysis and 1 of those is a bit unpleasant...

Today we've zoomed in on a single data point to better understand the nature of Oil and Gas Exploration and Production AD's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.